In new move to ease currency controls, China will allow banks to set exchange rates

China has announced a new step toward easing its tight currency controls, allowing banks to set their own exchange rates in dealings with customers.

Thursday's announcement is the latest in a series of moves intended to make China's government-controlled financial system more market-oriented.

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The U.S. and other countries have criticized Beijing's tight controls on its yuan. They say the currency is kept undervalued, giving Chinese exporters an unfair price advantage and hurting foreign competitors.

Beijing has issued a flurry of modest financial reforms in recent months. In March, it widened the band in which the yuan is allowed to fluctuate against the dollar, though to only 2 percent. It also has announced plans to allow the creation of privately financed banks.